Reckoning

The later 1980s were a period of erratic growth—rapid but unstable. Tigers and sea turtles spurred development throughout the decade: East Asia’s “tiger” economies—Taiwan, Hong Kong, Singapore, and South Korea—paved China’s way in state-led, export-intensive growth. China's “Sea turtles” were the many overseas Chinese who brought capital and knowledge acquired abroad back to their mother country. However, unresolved contradictions lurked in the new political economy of Deng’s China. Frustrations over stalled political reform—enflamed by widespread urban economic grievances over inflation and corruption—erupted in street demonstrations that paralyzed the PRC in the spring of 1989. The Tiananmen crisis would have lasting political repercussions on the cause of democracy—but also unintended economic aftereffects.

Hong Kong Provided China with Capital

Japan Provided Support for Reform

Autocracy and Economic Freedom Brought Growth

Expectations Are the Most Important Growth Factors

Sheryl WuDunn

Journalist

Sheryl WuDunn is a best-selling author, business executive and lecturer. Currently, she is president of TripleEdge, a social investing consultancy, and works as a director with Mid-Market Securities, an investment banking boutique serving the middle market. She is co-author of Half the Sky: Turning Oppression into Opportunity for Women Worldwide, a New York Times best-selling book about the challenges facing women around the globe.

WuDunn previously worked for The New York Times, The Miami Herald, Reuters, and The Wall Stret Journal in various roles. She has also been a vice president at Goldman Sachs Asset Management. WuDunn, the first Asian-American to win the Pulitzer Prize, was awarded the prize with her husband Nicholas Kristof for her reporting from Beijing about the Tiananmen Square protests. In addition to her Pulitzer, WuDunn has received the George Polk award for journalism and won an Overseas Press Club award.

WuDunn graduated from Cornell University. She has also earned an MBA from the Harvard Business School and an MPA from the Woodrow Wilson School at Princeton University.

I think that 5 year period from 1989 to 1994 in China was absolutely critical. In the late 80s, you had this Hundred Flowers Bloom. You had a lot of people screaming for democracy. Obviously, in the Tiananmen Square crackdown, what led to that was this craving for democracy. They didn't know what it was at the time, and I remember interviewing kids and they were saying, "We don't know what democracy is but we know we need more of it." That was the approach at that time. The crackdown happened, a lot of terrible things happened, people, students, were killed in Tiananmen Square. The economy ground to a halt. It had been growing 9, 10% every year and it ground to 4%, which is really pretty bad in China. The question was: How long would that last? So, we knew that the government had very strong levers with which to manipulate the economy. But, you know something, that next year the ice began to fall. And the critical thing in 1990 and 1991, '92 was figuring out: When was it going to resurge? And we got the inkling of it. People thought the political atmosphere was going to kill the economy, was just going to choke it. But, we, actually, really were convinced that, no, once you have put in China the taste of growth, once that the ordinary Chinese had the taste of what it is to acquire things, there was going to be no stopping it. So, the question was finding out when was that resurgence. I remember taking a tour through the south of China because that was always the forefront of the economy so, if they were actually beginning to recover, you thought the rest of China would follow. And I was visiting a factory that made bathroom equipment, bathtubs, toilets, everything. It was an American company. I was walking through this their display room, they have this huge jacuzzi, huge! And I said, "In China, what is this doing here in the show room?" And I asked the manager, "So, do you really sell these?" And he pulled me aside and quietly said, "Yeah, we just sold two of them." And I said, "How much are they?" And it was some astronomical sum, like the equivalent of 50 thousand dollars. In China back then, no one had that money. And I said, "Please, tell me who was it?" He said, "No, I can't tell you that." And I said, "Please, tell me who it was." And I coaxed it out of him and, sure enough, it was the President of China, Jiang Zemin, who had bought a jacuzzi. I knew then and there that things were not actually going to fall. And I was right. That was the beginning. China started to recover, and since then it has been almost unstoppable. Yeah, there are fits and starts, but there is an enormous engine going there that will be hard to stop.